SAN FRANCISCO: A price cut had Verizon on track Tuesday to go ahead with the purchase of Yahoo’s internet business, and share the costs from a pair of epic hacks that threatened to derail the deal.
Yahoo slashed the price of its core Internet business by $350 million.
The announcement settled concerns that the cyber attacks and how they were handled by the California-based firm might scuttle the acquisition or result in an even deeper cut to the price.
“I think at this point Verizon was just too far down the path, and exiting would have been too embarrassing,” analyst Rob Enderle of Enderle Group told AFP.
But, he said, “I would have walked away. It is kind of a foolish bet.”
Under revised terms of the delayed deal, Verizon’s purchase of Yahoo assets will total $4.48 billion.
Yahoo still faces probes and lawsuits related to the cyber attacks, which affected more than 1.5 billion accounts, and the timing of the disclosures.
Yahoo announced in September that hackers in 2014 stole personal data from more than 500 million of its user accounts. And in December it admitted to another cyber attack from 2013 affecting more than a billion users.
“Enormous hacks, dubious disclosure, bad decisions have all contributed to a decline in value such that Verizon had to renegotiate its bid for Yahoo’s assets,” Endpoint Technologies Associates analyst Roger Kay said in an emailed comment.
But Verizon was eager to expand its reach into digital advertising, even though the transaction faced setbacks due to the hacks.
“We have always believed this acquisition makes strategic sense,” said Verizon executive vice president Marni Walden.
